Sinovac Biotech Ltd.

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Sinovac Biotech Ltd.
Corporate PresentationFebruary 2007
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Disclaimer
The information contained in this document has
not been independently verified by Sinovac
Biotech Ltd. (the Company), or any of their
respective affiliates, advisers or
representatives.  No representation or warranty,
whether expressed or implied, is made as to, and
no reliance should be placed on, the fairness,
accuracy, completeness or correctness of such
information or opinions contained herein.  None
of the Company and the Sponsors nor any of its
respective officers, employees, affiliates,
advisers or representatives shall have any
liability whatsoever (in negligence or otherwise)
for any loss howsoever arising from any use of
this document or its contents or otherwise
arising in connection with this document. This
document contains certain forward-looking
statements with respect to the Company, including
its beliefs and expectations about the future as
at the date of this presentation.  These
forward-looking statements are based on a number
of assumptions regarding the Companys operations
and factors beyond the Companys control,
including but not limited to, the political and
economic environment in which the Company and its
subsidiaries will operate in the future.  Our
actual results of operations, financial condition
or business prospects may differ materially from
those expressed or implied in these
forward-looking statements for a variety of
reasons and as such, no reliance should be placed
on these forward-looking statements. The Company
and the Sponsors, and their respective
affiliates, advisors and representatives
undertake no obligation to update these
forward-looking statements for events or
circumstances that occur subsequent to such
dates. This document does not constitute or form
part of any offer for sale or invitation, or
solicitation of an offer to subscribe for or
purchase any securities.  No part of this
document shall form the basis of or be relied
upon in connection with any contract or
commitment whatsoever.  The proposed offering is
made in reliance on Rule 144A offering and the
Company has not and will not register its
securities pursuant to the U.S. Securities Act of
1933 or any state securities laws of the United
States. Accordingly, any decision in connection
with the subscription or acquisition of
securities of the Company pursuant to or in
connection with any offering must be made solely
on the basis of the information to be contained
in the prospectus or other offering memorandum to
be issued by the Company in connection with such
offering. The information of the documents should
not be relied upon as representation of the
Company. No part of this document may be
reproduced, redistributed or passed on, directly
or indirectly, to any other person (whether
within or outside your organization/firm) or
published, in whole or in part, for any purpose. 
No part of this document may be distributed,
reproduced, taken or transmitted into the
Peoples Republic of China, the United States,
Canada, or Japan or to any U.S. person by any
means whatsoever. Failure to comply with this
restriction may constitute a violation of law.
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Investment Highlights
Fully-Integrated Biopharmaceutical Company
Focused on Infectious Diseases Prevention
1
Three Vaccines Approved and Commercialized
2
Product Pipeline Serves as Growth Engine
3
Large Untapped Market Opportunity in China and
Worldwide
4
Established Sales, Marketing and Distribution
Network
5
Well Defined Business and Operating Strategy
6
Experienced and Committed Management Team
7
Compelling Revenue Growth and Gross Margins
8
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Fully-Integrated Biopharmaceutical Company
Focused on Infectious Diseases Prevention
1
Fully- Integrated Operating Structure

• Core strengths in researching, developing,
  manufacturing and commercializing a variety of
  vaccines that protect against infectious diseases
• Two state-of-the art production sites spanning
  over 8,800 square meters

• Proven track record of successfully developing
  and commercializing three vaccines for Hepatitis
  A, Hepatitis B and Flu
• Regulatory approval received and marketing three
  vaccines to expanding China market

Proven Track Record of Product Development
Deep Product Pipeline

• Three vaccines in development for Avian flu, SARS
  and Japanese encephalitis
• Collaborations with leading universities,
  colleges and research institutes that have strong
  vaccine research capabilities and proven track
  record in China
• Seeking vaccine regulatory approvals in targeted
  international markets to tap US10 billion global
  vaccine market with estimated 10 annual growth

Strong Distribution Network

• Strong relationships with municipal and
  provincial CDCs
• 60 sales professionals assigned to 13 sales
  districts, covering 25 provinces and
  municipalities

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Established Track Record

• Completed clinical trials for Bilive
• Completed clinical trials for Anflu
• Established offshore holding
• Listed in the US

• Received Chinese government grant for production
  expansion
• Established domestic RD collaboration

• Bilive approved
• Anflu approved
• Commence clinical trials for Panflu

• Tang Shan Yian Biological Engineering Co. founded

• Sinovac Biotech Co. established

1993
2002
1999
2003
2004
2005
2001
2006
2007

• Healive Launch

• 1st sale of Anflu
• Positive Phase I results for Panflu
• Signed distribution agreement with LG Life
  Sciences
• Filed Phase II application for Panflu in Nov 2006

• SFDA granted MDC for basis for Healive

• Positive Phase I results for SARS vaccine
• Listed on AMEX (SVA)
• Co-development with Chinese CDC for bird flu
  vaccine

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Three Vaccines Approved and Commercialized
2
In-Market

Submit NDA
Phase III
Phase II
Phase I
Pre-Clinical
Approved Vaccines

• Healive (Hepatitis A)

• Anflu (Split Influenza)

• Bilive (Hepatitis A B)

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HealiveTM (hepatitis A)
Product Description
Market Opportunity

• First inactivated hepatitis A vaccine developed
  and produced in China with private corporation
  intellectual property rights
• Marketing and sales initiated in May 2002
• Manufacturing capacity of up to 6 million doses
• Approximately 2.4 million doses sold in 2006
• Excellent safety and high stability profile
• Available in adult and child doses

• Chinas hepatitis A infection rate in some areas
  as high as 80 of the population translates into
  approximately 2.4 million documented cases
  annually
• Liquid attenuated hepatitis A vaccines excluded
  from the vaccines batch approval list issued by
  the NICPBP on December 23, 2005
• Historically approximately 80 of the hepatitis A
  vaccine sales in China
• Expect significant increase in demand for Healive
• Sell pre-filled syringes and vial packages with
  2.5 year shelf life

Strong Sales Growth

• gt100 2006 sales growth

Doses (000s)
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AnfluTM (split influenza)
Product Description
Market Opportunity

• Fastest growing segment within the vaccine
  industry, estimated to be doubled in the next
  five year
• Increased awareness due to Avian flu outbreaks
  expected to drive market growth

• Egg based, split influenza vaccine developed by
  Sinovac scientists
• Obtained New Drug Certification from SFDA in
  Feb 2005 and received GMP certification from SFDA
  for production in Oct 2005
• Delivered in 4Q06 a limited amount through batch
  release process within Chinese government and to
  the market
• Increasing sales anticipated in 2007
• Manufacturing capacity up to 2 million dose and
  plan to build a larger vaccine production
  facility in Beijing
• Clinical trial results showed immunogenicity
• met European regulatory requirements for the
  licensing of an influenza vaccine

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BiliveTM (hepatitis A B)
Product Description
Market Opportunity

• First, and currently the only combined
  inactivated hepatitis A and B vaccine developed
  and marketed in China
• Private corporation intellectual property rights
• Excellent safety and stability profile
• Obtained regulatory approval in June 2005 and
  marketing initiated in July 2005
• Over 50,000 doses sold as of June 2006
• Available in adult and child doses

• HBV can cause chronic lifelong infection,
  cirrhosis (scarring) of the liver, liver cancer,
  liver failure and death
• HBV infection rate estimated to be 6070 of the
  population in China

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Product Pipeline Serves as Growth Engine
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In-Market

Phase III
Phase II
Phase I
Pre-Clinical
Vaccine Pipeline
Submit NDA

• Panflu (Pandemic Influenza)

• Japanese Encephalitis

• SARS

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PanfluTM (pandemic influenza)
Candidate Description
Recent Excerpts from The Lancet
In a previous trial published by The Lancet,
scientists found that 30 micrograms of a vaccine
containing part of the H5N1 virus given in two
doses with an adjuvant, an additive that can
increase effectiveness, produced a good immune
response in humans. In the latest trial, Chinese
researchers tested the effectiveness of a vaccine
that contains a modified version of the whole
H5N1 virus plus adjuvant. Vaccines made of whole
viruses are known to trigger greater immune
responses but are also known to produce more
side-effects A two-dose regimen of an
adjuvanted 10 µg inactivated whole-virion H5N1
vaccine met all European regulatory requirements
for annual licensing of seasonal influenza
vaccine. Lower doses of this vaccine could
achieve immune responses equivalent to those
elicited by adjuvanted or non-adjuvanted
split-virion vaccines. The use of a whole virion
vaccine could be more adaptable to the
antigen-sparing strategy recommended by WHO for
protection against an infl uenza
pandemic. (Press Release by The Lancet, 9/7/06)

• Targeting pandemic influenza virus (H5N1)
• Co-developed by Sinovac and China CDC
• Virus strain is delivered by NIBSC, influenza
  network laboratory of WHO
• Phase I clinical trial approved by China SFDA on
  Nov 22, 2005 and results
• Phase I results published in The Lancet on Sept.
  7, 2006 and showed good immunogenicity
• Filed application in Nov. 2006 with SFDA to
  commence Phase II clinical trial

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Product Candidates
Japanese Encephalitis Vaccine
SARS Vaccine

• Mosquito-born virus that infects the central
  nervous system in human beings and animals
• Humans, especially children, are susceptible to
  JE virus
• Significant unmet need in Southeast Asia and
  Western Pacific
• Developing a potentially safer and more effective
  inactivated JE vaccine

• Independently developed by Chinese scientists,
• Received authorization from the China SFDA in
  January 2004 to conduct the phase I clinical
  trial
• On December 5, 2004, the PRC Ministry of Science
  and Technology, the Ministry of Health and the
  China SFDA jointly announced Phase I results
• No adverse reactions and demonstrated safety
• Intend to resume process required to obtain
  regulatory if virus reemerges

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Large Untapped Market Opportunity
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Market Drivers in China
Global Market

• Huge population base
• 1.3 billion people
• 15 million babies born every year
• Increasing percentage of Chinese population over
  65
• Increasing Private-Public partnerships that
  encourage immunization
• Rising economic prowess encourages healthcare
  initiatives

• Global vaccine market estimated at US10 billion
  with an annual growth rate of 10

Chinas Projected Vaccine Demand Consumption
Growth

• 21.8 growth rate for vaccine usage in China

10,000
30
9,381
26.9
23.7
Key Market Statistics
25
26.3
8,000
18.5
20
19.9
6,000

• Chinas hepatitis A infection rate as high as 80
  of the population in some areas
• Chinas hepatitis B vaccination rate from 2001 to
  2004
• 76 for children born in hospitals
• 28 for children born at home
• Flu vaccines represent the fastest growing
  segment of the market
• Expected to double on size on the next five years

(USmm)
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Vaccine Concumption Growth Rate ()
4,000
2,920
10
2,000
5
887
358
124
0
0
1992
1997
2002
2007
2012
Source AMID Co report, December 2003
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Established Sales, Marketing and Distribution
Network
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Geographic coverage encompasses 25 provinces and
municipalities
Sinovac
Heilongjiang
13 Representative offices 60 Sales Professionals
Jilin
Xinjiang Uygur Autonomous Region
Liaoning
Beijing
Inner Mongolia Autonomous Region
Tianjin
Ningxia Autonomous Region
Hebei
Shanxi
Qinghai
Shandong
Municipal CDC
County CDC
Provincial CDC
Gansu
Shaanxi
Henan
Jiangsu
Tibet Autonomous Region
Shanghai
Anhui
Sichuan
Hubei
Chongqing
Zhejiang
Jiangxi
Hunan
Guizhou
Fujian
Clinics and Hospitals
Taiwan
Yunnan
Guangxi
Guangdong
Hainan
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Vaccine Distribution in China
Decentralized Distribution System

• PRC government recently decentralized its
  distribution system for vaccine products to
  permit vaccine manufacturers to market and sell
  their vaccines to
• certain local CDCs
• certain inoculation centers and wholesalers
• in addition to those provincial CDCs

Licensed Distributor
Clinics Hospital
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Well Defined Business and Operating Strategy
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Develop and market vaccines that address unmet
medical needs
Acquire complementary technologies and products
that target large market opportunities
Seek regulatory approvals in target markets such
as Mexico, Latin America and Southeast Asia and
expand manufacturing production
Continue to improve vaccine production, optimize
quality and lower production costs
Expand manufacturing capacity to meet growing
demand in China
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Growth Objectives
Leverage core competences in research,
development, production and sales to become a
global vaccine player
Global Biotech Company
Leader in Chinas Biotech Industry
Fully Integrated Vaccine Developer with
significant competitive advantages
Medium-Term Expand production
Short-TermIncrease revenues and achieve
profitability
Long-TermPenetrate global markets
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RD and Manufacturing Facilities
Designed and maintained to conform with the WHO
recommended bio-safety standards
Headquarters Beijing
RD Center Tang Shan Yian

• 4,500 sqm facility located in Beijing PKU Biocity
  
• Hepatitis A vaccine production line
• Designed and validated by a European companies
  based on international GMP standards
• China GMP qualified with capacity of 6 million
  doses per year.
• China GMP qualified influenza vaccine production
  line with capacity of two million doses per year
• Expanding production capacity of human-use avian
  influenza vaccine to 20 million doses with
  Chinese government grant

• 4,000 sqm state-of-the-art laboratory
  experimental facility
• China GMP qualified

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Skilled Labor Force
As of December 31, 2006, Sinovac had 249 employees
The Educational Level of Employees
Employees by Function


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Collaborations
LG Life Sciences
China CDC
Glovax

• In May 2005, LG Life Sciences expressed interest
  in marketing Healive worldwide
• In return, interested in distributing LG Life
  Sciences hepatitis B vaccine, Euvax-B
• In February 2006, entered into an exclusive
  distribution agreement to market and distribute
  Euvax B in mainland China for five years from the
  date of regulatory approval
• Registration documents collected and to be
  submitted to SFDA
• In March 2006, signed a letter of intent to grant
  exclusive distribution rights for the pandemic
  influenza vaccine in Korea to LG Life Sciences

• In August 2005, authorized Glovax as exclusive
  distributor in Mexico for its vaccine products
• Currently, Glovax is seeking marketing approval
  in Mexico, which will take up to few years

• In December 2004, signed co-development agreement
  with the China CDC
• Sinovac agreed to
• to conduct pandemic influenza vaccine RD based
  on its established vaccine RD technical
  platform
• apply for the new drug certificate, production
  license and patents
• The China CDC agreed to
• strategize development of the pandemic influenza
  vaccine
• provide Sinovac with scientific guidance to
  vaccine technicalities and conduct certain
  pandemic related research and vaccine
  development-related analyses

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Experienced and Committed Management Team
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Over 60 years of experience in the vaccine
industry

• Devoted 20 years to the hepatitis A virus
  research and one of the technological inventors
  of the Healive
• In charge of the "Research on Inactivated SARS
  Vaccine and Research on Pandemic Influenza
  Vaccine (H5N1)
• EMBA of National University of Singapore,
  Executive Member of China Hepatitis Funds
  Committee, one of the founders of Sinovac Beijing

Dr. Weidong Yin Chairman, President CEO

• Acting CFO of Sinovac Biotech Ltd. and manager of
  the Financial Department manager of Sinovac
  Beijing 30 years of experience in financial
  management, cost management and cost control
• Previously Senior Accountant of Financial
  Department of Lunan District Economics Committee,
  Tangshan City, manager of the Financial
  Department of Tangshan Yian

Jinling Qin CFO

• More than 20 years experience in vaccine
  development and production
• Involved in the construction of the Inactivated
  Hep A and Split Influenza vaccine
• Bachelor in Medical Treatment from Sun Yat-sen
  University of Medical Sciences, Senior Engineer

Jiansan Zhang Vice President

• Over 10 years of experience in the field of
  business development and registration management
• MBA from University of International Business and
  Economics, Beijing, Bachelor of Science in
  Biology from Peking University, ACCA qualified.

Nan Wang Vice President

• 20 years experience in vaccine sales, sales
  channel development, and market share expansion
• Previously Sales Manager at Changchun Changsheng
  Biological Product Co., Ltd. and Vice President
  at Shenzhen Shukang Biological Products
• Graduated from Norman Bethune University of
  Medical Sciences

Changjun Fu Vice President
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Compelling Revenue Growth
8
CAGR of 75.3
CAGR of 81.4
CAGR of 73.3
Unaudited
Unaudited
Full Year Results
1H Results
2H Results
23
Compelling Gross Margins and
Approaching Breakeven
Gross Profit and Gross Margin
US Millions
US Millions
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Annual Results
Income Statement
25
Semi-Annual Results
Income Statement
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Government Support
While not a state-owned agency, Sinovac receives
significant support from the Chinese government

• Top official visits
• President Hu Jintao
• Premier of China Wen Jiabao
• State Counselor Chen Zhili
• Financial Grants

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Well Positioned for Future Growth

• Robust product portfolio allows for future growth
  
• Healive
• First inactivated HAV vaccine developed, produced
  and marketed in China
• Recent positive regulatory change provides
  substantial growth potential
• Bilive
• Only combined inactivated hepatitis A B vaccine
  developed and marketed in China
• Anflu
• Successfully launched on September 2006 with
  orders received on the same day
• Expect to produce 300,000 doses in 2006 for the
  2006-2007 flu season
• Pandemic influenza vaccine
• Positive Phase I clinical trial results exceeding
  the government required criteria
• Application to commence Phase II trial filed with
  SFDA in Nov. 2006
• Japanese Encephalitis vaccine
• Potentially safer and more effective inactivated
  vaccine
• SARS vaccine
• First institution in the world to conduct human
  clinical trials of a SARS vaccine
• Increase manufacturing capacity to meet demand in
  China
• Expanding production of avian influenza vaccine
  to 20 million doses
• Expand into international markets through
  strategic collaborations

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Upcoming Milestones

• Continue to improve the financial performance and
  achieve operating breakeven
• SFDA approval to commence Phase II trial for
  pandemic influenza vaccine
• Application filed in Nov. 2006 and currently
  under review by SFDA
• Maximize collaborations
• Apply for regulatory approval for sale in China
  of LG Life Sciences Euvax-B
• Authorize Glovax for distribution of vaccines in
  Mexico
• Collaborate with China CDCs on influenza-related
  research and development
• Raise additional capital to fuel capacity
  expansion and support international growth

Well positioned to capture the 1 position in
China with proven RD capabilities, well
established manufacturing, sales and
distribution infrastructure
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Investment Highlights
Fully-Integrated Biopharmaceutical Company
Focused on Infectious Diseases Prevention
1
Three Vaccines Approved and Commercialized
2
Product Pipeline Serves as Growth Engine
3
Large Untapped Market Opportunity in China and
Worldwide
4
Established Sales, Marketing and Distribution
Network
5
Well Defined Business and Operating Strategy
6
Experienced and Committed Management Team
7
Compelling Revenue Growth and Gross Margins
8
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• Appendix

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Competitor Analysis
Competition in China
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Competitor Analysis
Pros
Cons

• With different kinds of products and long
  production history
• Experienced technical experts
• Long-term relationship with government and
  clients
• Control the market for EPI products

• Complicate policy-making process
• Simple company ownership
• Weaker ability of capital raising
• Weaker marketing capability

Domestic

• Better recognized brand name
• Stronger Capital Raising Capability
• Higher Investment in Sales Marketing
• Higher Profit
• Stronger service ability

• Only maintain sales branches in China, not
  production facilities
• Lack of cooperation with the government on
  vaccine RD and without the governments supports
  
• With limited service scale
• Lower market share
• Far away from the policy makers and inflexible
  marketing policies

International